FXStreet (Mumbai) - The Japanese yen retreats from fresh three-month lows and pares losses versus its American rival in the European morning, now pushing USD/JPY back towards 100-DMA. USD/JPY: gains capped at daily R1 Currently, the USD/JPY pair trades 0.09% higher at 121.66, fading a rally to fresh three-month highs scored at 121.84. The USD/JPY pair ran through fresh offers near the daily R1 placed at 121.86 and now recedes gains as the JPY bulls tries to recover lost ground on the back of major turnaround in risk conditions as the European stocks trade in the red. Moreover, the US dollar halted its upbeat momentum and turned back lower across the board, which also led to the USD/JPY retreat from fresh highs. Looking ahead, the pair will continue to track the sentiment on the European stocks, while awaiting the US unemployment claims will be reported in an otherwise data-light US trading calendar. USD/JPY Technical levels to watch The prices retreated from highs, with the immediate support in sight at 121.58 (100-DMA), below which 121.42 (200-DMA) would be tested. A break below the last, 121/120.98 (round number/ Nov 4 low) comes into the picture. While to the upside, the pair finds immediate resistance at 121.84/86 (daily highs/ R1) and from there to 122 handle. For more information, read our latest forex news.